Nationalise the Railways

I’ve been moved to write this post after reading something similar on Liberal Democrat Voice about bringing the railways back into public ownership. I think that what the last Labour Government did (or rather didn’t) do about our railway system was a massive lost opportunity to put right one of the most wrong-headed decisions of John Major’s administration.

Unlike David Thorpe,  I do believe that there are other things which should be brought back into public ownership, but surprisingly the railways would be one of the easiest industries to deal with. On so many levels, private operation of our railway network has failed. It has failed the taxpayer, failed the passenger, failed the staff, but most importantly, it has failed our country.

David is right in his blog when he says that the cost of running our railways has risen – a few years ago Roger Ford did an analysis on rising costs – and introduced the concept of Boiling Frogs. The result was that there had been a 3 times increase in costs, even taking into account the increase in output which had occurred. The higher passenger numbers carried – frequently cited as a ‘success’ of the privatised railway are actually more likely a result of long period of economic growth experienced in the UK, from 1993 until the banking crisis affected the UK in 2008. Even before privatisation passenger numbers had been linked to growth since the end of the Beeching cuts of the 1960’s.

David also says that his call is not for a return the so-called “good old days of British Rail”, saying that BR was inefficient, slow at adapting to change, was bureaucratic and used taxpayers resources badly. Well, he must have been looking at a different rail system than the one I knew. BR in the 80’s was the MOST efficient rail system in europe, taking less subsidy per passenger mile than any other operator, and introduced massive capital investment programmes such as the HST and East coast electrification whilst receiving less money in each succeeding year. During this period BR re-organised itself not once, but twice, and still ran one of the safest transport networks in the world (despite what some tabloids would have had you believe whenever there was an unfortunate accident). I say, why not bring back BR? What would it take?

Well, some of the system is already in some kind of public ownership – Network Rail took over the infrastructure from Railtrack, but suffers from a lack of accountability, and hence a lack of cost management, in the way that the old BR did. At one point under BR, any expenditure over £25,000 had to go to board level for approval, and many had to go to ministerial level as well, in a way that other nationalised industries did not have to go through. One of the franchises, East Coast is also under public control, although there are currently plans to re-let it.

All that privatisation has done is to create a system where private companies take the profit, but the taxpayer takes the risk. In the good times, companies make profits from increasing rail fares and ridership, whilst in the bad times the keys are handed back to the Government, or more subsidy demanded. In some cases the failed routes have continued to be run by the private company under a “management fee” arrangement where they earn 2% of all revenues. A licence to print money indeed. Money is leaking out of our rail system, where it could be used to re-invest and improve the network.

The answer is simple. We don’t re-let East Coast. We reform Network Rail. The Co-op party’s “Peoples Rail” campaign shows us the way forward. A mutual British Rail, with passengers and staff having a stake in the success would be transforamtional to the running of the railway. As further franchises come up for renewal we don’t renew them, but bring them into public’s ownership. By 2012, not only would services in East Anglia and the Pennines be included, but also the Inter-City route currently run by Virgin Trains. By the time of the next election in 2015, the majority of rail services would be run for the benefit of the passengers and staff, delivering savings for the taxpayer by integrating transport, not splitting it for ideological reasons.

So, to whoever is the next Labour Leader, can we make bringing back British Rail part of our manifesto?

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This entry was posted in Co-Op, Labour, Liberal Democrats, Nationalisation, Public Sector, Railways, Transport and tagged , , , , , , , . Bookmark the permalink.

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